Foreclosures Upheaval In California May Be Controlled (Part I)

Lenders are consistent with their efforts to help the striving homeowners to sustain their homes so that the massive number of foreclosed homes do not chock the housing and property market. This indicates that the much apprehended rise of foreclosures that might flood the property market in California may be averted primarily due to the positive responses from the banks towards the government effort as they prevented their activity of taking repossession of the distressed properties. The homes all over the state that were taken away by the lenders also decreased grossly as it fell to 37% as compared to last year’s figure during the same time period, especially as back then the foreclosures were soaring.

In case this trend of lesser foreclosures continues then it might allow some amount of recovery for the property market. The analysts strongly feel that a flood of foreclosed properties may just plunge the home values all over again, though the prices of the homes seem to be in control. The economist Kenneth Rosen with UC Berkeley feels that the government officials will do anything to ensure the gradual clearance of the foreclosure backlogs has also observed that, “I certainly don’t think there’s going to be a deluge, or second wave of foreclosures. There’s now an appetite to make sure we get this right.”

However, thousands of homeowners in California are still at risk of facing foreclosures as they have skipped the payments of their debts and despite this the lenders are trying to provide more time to these defaulting homeowners so that they can catch up with the payment schedules. This is happening as the lenders are also concerned about the clogging property market. John Walsh, the president of MDA DataQuick providing research based on the real estate, commented about the reluctance of the lenders towards foreclosing and observed that, “It’s not out of the goodness of their hearts. It’s because they’ve concluded that flooding the market with cheap foreclosures in this economic environment may not be in their best financial interest.”

According to the Bank of America Corp the foreclosure process can be minimized only by exhausting almost every alternative method and option so that the homeowners can retain their homes. They further observed, “We do not hold foreclosed properties off the market. We have an obligation . . . to prepare foreclosed properties for market and sell them as efficiently as possible.”

Many have the opinion that the big lenders including the officials of the government are working through an implicit agreement. Richard Green, the director of USC’s Lusk Center for Real Estate commented that, “I don’t think people are saying it to each other, but they’re seeing it’s in nobody’s interest to have mass foreclosures.”

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